Algoma Steel receives $345M commitment from South Korean shipbuilder

Algoma Steel has signed a memorandum of understanding with an international shipbuilder that could allow the company to build a new structural steel beam mill in Sault Ste. Marie, Ont., and create new jobs.   

The plant announced today that South Korean-based Hanwha Ocean has committed to providing Algoma Steel with up to $345 million for the creation of the mill and the purchase of Algoma products.

The agreement is dependent on whether South Korean businesses win a contract to build a fleet of new submarines. 

Officials say the deal supports the Canadian Patrol Submarine Project, a federal initiative aimed at acquiring up to 12 new submarines — “supporting long-term naval readiness and industrial sovereignty,” according to a release. 

Algoma Steel says the deal with Hanwha Ocean will satisfy the submarine project’s demand for contractors to invest in Canada as the program would be supported by Canadian steel and workers. 

“This arrangement demonstrates Canada’s Buy Canadian policy at work, ensuring that construction and sustainment activities are rooted in domestic supply chains,” the release stated.

The prospect of establishing a steel beam mill in the Sault was raised at the end of 2025 when Industry Minister Mélanie Joly said the feds would offer financial support to Algoma Steel if the project materialized.  

At the time, she estimated up to 500 of the 1,000 steelworkers losing their jobs in March could be rehired through a new mill. 

Of the $345 million in commitments from Hanwha Ocean, roughly $275 million would go toward the development of the structural steel beam mill itself, while the remaining dollars would cover Algoma products, according to the steel plant. 

The memorandum of understanding also includes that Algoma Steel will make annual payments to Hanwha Ocean for 10 years if and when the beam facility opens — equal to three per cent of the net sales of the facility.